Official announcement made: Ireland has applied for an economic bailout

Ireland has formally applied for an economic bailout following a press conference held yesterday evening in the Irish capital. An Taoiseach, Brian Cowen and Minister for Finance, Brian Lenihan announced that a formal application was submitted and accepted by Ireland’s EU counterparts. The Irish Government’s next step is the publication of a four year plan which aims to reduce spending by €15 billion. This will be announced on the 7th of December.

Cowen reiterated that the subject of Ireland’s current corporate tax rate of 12.5 per cent (the lowest in Europe) had not yet been brought up in talks with the EU. However, French president, Nicolas Sarkozy, said that while a rise in the Irish corporation tax would not be a condition of the bailout, he expects Ireland will increase its tax rate.
“It's obvious that when confronted with a situation like this there are two levers to use: spending and revenues,” President Sarkozy said.
“I cannot imagine that our Irish friends, in full sovereignty (would not use) this because they have a greater margin for manoeuvre than others, their taxes being lower than others.”   http://biz.thestar.com.my/news/story.asp?file=/2010/11/22/business/74743...

It came as no surprise to me yesterday evening when it was officially announced that Ireland had formally applied for an economic bailout. An Taoiseach Brian Cowen and Minister for Finance Brian Lenihan announced that a formal application was submitted and accepted by Ireland’s EU counterparts. The Irish Government’s next step is the publication of a four year plan which aims to reduce spending by €15 billion. This will be announced on the 7th of December.

Cowen reiterated that the subject of Ireland’s current corporate tax rate of 12.5 per cent (the lowest in Europe) had not yet been brought up in talks with the EU. However, French president Nicolas Sarkozy said that while a rise in the Irish corporation tax would not be a condition of the bailout, he expects Ireland will increase its tax rate.

“It's obvious that when confronted with a situation like this there are two levers to use: spending and revenues,” President Sarkozy said. “I cannot imagine that our Irish friends, in full sovereignty (would not use) this because they have a greater margin for manoeuvre than others, their taxes being lower than others.”

Gerald FitzGerald's picture
Chief Operations Officer Ireland
gfitzgerald@premiergp.com